Does Allstate Appoint Independent Agents?

Allstate is known for its captive agency force of exclusive agents who only sell Allstate insurance products. However, Allstate also maintains an independent agency program that appoints independent agents to represent the company. So the short answer is yes, Allstate does appoint independent agents, but with some caveats.

A Brief History of Allstate’s Independent Agency Program

Allstate first began appointing independent agents in 1974 as a way to expand into rural markets where there were not enough Allstate exclusive agents. For many years, the independent agency program was focused on rural markets and smaller cities.

In the 1990s and early 2000s, Allstate aggressively expanded the independent agency program, appointing thousands of independent agents across the country. Many of these agents were appointed in urban and suburban markets where there were already existing captive Allstate agents.

This expansion ignited unrest among the exclusive agent force, who did not like having to compete directly against independent agents selling Allstate policies in their territories. Independent agents also had more favorable commission structures at the time.

In 2013, Allstate began consolidating the independent agency program back under centralized management. The program had declined to about 1,700 agents nationally at that point.

Allstate’s Current Independent Agency Strategy

Today, Allstate takes a more targeted approach to appointing independent agents. According to Allstate statements, independent agents are only appointed in areas where there are not enough exclusive agents to meet demand. Typically this means rural markets.

Allstate claims they do not appoint independent agents in areas where there are existing exclusive agents, to avoid direct competition. Independent agents are positioned for markets Allstate captive agents are not adequately serving.

However, there have been reports of Allstate appointing independent agents in suburban and urban markets in recent years. Specifically in Texas, there were said to be 19 new indie appointments in cities like Houston, Dallas, Austin and Fort Worth as of 2013.

So while Allstate states they focus on rural markets, they may still appoint select independent agents in more populated areas on occasion.

The number of active Allstate independent agents is not publicly reported. But most estimates put the number between 1,500-2,000 nationwide currently.

Requirements for Allstate Independent Agents

Allstate has specific requirements independent agents must meet to be appointed. These include:

• Property and Casualty License: Agents must be properly licensed P&C agents in their state.

• Authority to Represent Allstate: Agents must have the proper state appointments to represent Allstate.

• Minimum Experience: Agents generally need at least 2 years of experience in the insurance industry before Allstate will appoint them. Some states may require more experience.

• Errors and Omissions Insurance: E&O insurance requirements must be met.

• Office Location: Allstate requires indie agents to have a commercial office location. Home offices are generally not acceptable.

• Market Need: There must be an identified need for more Allstate representation in the agent’s area. Allstate claims they will not appoint if there are already enough exclusive agents.

• Minimum Production: Producing agents typically need to write at least $250k in premium annually to remain appointed. Requirements may vary by market.

• Reputation: Agent must have a good reputation, acceptable loss ratio history, clean FINRA record, etc.

• Interview: Allstate thoroughly vets and interviews potential appointments. Not all agents who apply will be appointed.

Overall, Allstate has high standards for appointing independent agents, even in rural markets. They look for experienced agents with proven production track records.

Contracts and Commissions for Allstate Independent Agents

Allstate offers independent agents a standard commission contract that looks like:

• 15% commission on new Allstate auto and property business
• 10% commission on Allstate renewals
• 15% commission on new Allstate life and retirement sales
• 3-5% commission on Allstate renewals

There are also opportunities for bonuses and supplemental commissions based on volume and profitability.

The standard commission rates for indie agents are slightly more favorable than the contract for exclusive agents. Although exclusive agents can also qualify for bonuses.

Independent agents have the flexibility to represent other insurance carriers besides Allstate. However, some states may limit representing competitors for new business sales.

Allstate independent agents have the ability to sell all Allstate insurance products, including:

• Auto
• Homeowners
• Renters
• Condo
• Landlords (some states)
• Boat
• Motorcycle
• Off-road vehicle
• Motor home
• RV
• Manufactured home
• Personal excess liability
• Small business
• Life insurance
• Retirement products

They have full access to Allstate’s brand, products, and resources to service existing Allstate customers.

The Bottom Line

While most Allstate agents are exclusive captive agents, Allstate does maintain an independent agency program that appoints licensed agents in select rural markets.

Independent agents must meet Allstate’s strict requirement and have an existing book of business. Allstate claims not to appoint indie agents in markets where there are already enough exclusive agents.

But there have been some reports of Allstate indie appointments in urban areas recently. So there may be exceptions in some cases.

Overall, the independent agency program provides Allstate with an additional channel to reach customers in areas not served by exclusive agents. But exclusives still make up the core of Allstate’s agency distribution model.